Ankh Services, Inc.

National Labor Relations Board - Board Decisions

Jul 16, 1979

243 N.L.R.B. 478 (N.L.R.B. 1979)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Ankh Services, Inc. and Local 50, Service Employees
International Union, AFL-CIO-CLC, Petitioner.
Case 14-RC-8808
July 16, 1979
DECISION ON REVIEW AND ORDER
REMANDING PROCEEDING TO REGIONAL
DIRECTOR
Upon a petition duly filed under Section 9(c) of the
National Labor Relations Act, as amended, a hearing
was held before Hearing Officer James 1. Singer of the
National Labor Relations Board. On December 20,
1978, the Regional Director for Region 14 issued a
Decision and Direction of Election in which he found
appropriate a unit stipulated to by the parties consist-
ing of all regular full-time and part-time in-home ser-
vice workers employed by the Employer, excluding
all office clerical and professional employees, guards,
and supervisors and defined in the Act. Thereafter, in
accordance with Section 102.67 of the National La-
bor Relations Board Rules and Regulations and
Statements of Procedure, Series 8, as amended, the
Employer filed timely request for review of the Re-
gional Director's decision, contending that the Re-
gional Director erred in asserting jurisdiction over its
operations.
On January 16, 1979, the National Labor Relations
Board, by telegraphic Order, granted the Employer's
request for review. Thereafter, the Employer filed a
brief on review and the Petitioner filed a brief in sup-
port of the Regional Director's decision.
The Board has considered the entire record in this
case, including the briefs, with respect to the issues
under review and makes the fo!!owing findings:
The Employer contends that the Board should de-
cline to assert jursidiction over it on either or both of
two grounds: (I) because the Employer shares the
"political subdivision" exemption of Section 2(2) of
the Act; and (2) because the Employer's in-home ser-
vice workers fall within the "domestic service" ex-
emption of Section 2(3) of the Act.
The Employer is a privately owned, for-profit Mis-
souri corporation which provides, through its in-
home service workers, in-home personal care and
housekeeping services for aged, low-income, emotion-
ally disturbed, or mentally or physically disabled in-
dividuals (hereinafter collectively referred to as cli-
ents) in the St. Louis, Missouri, metropolitan area.
The primary purpose of the Employer's operation is
to assist such clients in caring for and maintaining
themselves in their own residences so as to make their
institutionalization in nursing homes, mental institu-
tions, and other such facilities unnecessary.
Over 90 percent of the Employer's in-home service
to clients is rendered pursuant to an annual contract
between the Employer and the State of Missouri's Di-
vision of Family Services (DFS).' The Employer also
has a similar contract with the State of Missouri De-
partment of Mental Health (DMH).2 In addition to
the services provided pursuant to its contracts with
DFS and DMH, the Employer, at the time of the
hearing in December 1978, was also providing such
in-home service to a relatively small number of pri-
vate clients. The record indicates, however, that the
Employer is gradually phasing out its business with
private clients and is no longer actively soliciting new
private clients.
The Employer's contract with DFS provides, in
pertinent part, that DFS shall determine which cli-
ents are eligible to receive the Employer's services3
and which services are to be provided to clients pur-
suant to an individualized service care plan prepared
by DFS for each client.4 The contract also fixes the
maximum number of hours of service the Employer is
authorized to provide to each client per month5 and
provides that the Employer will be reimbursed
monthly by DFS at the flat rate of $5.75 per hour fbr
' Pnor to 1977 DFS, through its own state employees, directly provided
many of the same services now provided by the Employer's in-home service
workers pursuant to the Employer's contract with DFS. Although DFS is
still engaged on a small scale in directly providing such services, the bulk of
such services is now being provided pursuant to contracts between DFS and
private companies such as the Employer.
2 The En.ployer's contract with DMH sets a $5.000 limit on the amount of
the Employer's services which DMH will purchase pursuant thereto, repre-
senting less than 5 percent of the Employer's total sales of service during the
first 10 months of calendar year 1978.
Although not called for in the contract, the Employer makes a semiannu-
al recommendation to DFS as to whether clients initially designated by DFS
to receive services should be continued as clients; the Employer's recommen-
dations in this regard are almost always approved by DFS.
U4 nder the terms of its contract with DFS the Employer's in-home service
workers are expressly prohibited from providing nursing care of any kind or
administering prescribed or patent medicines. Instead. the in-home service
workers are required to perform such services as meal planning and/or meal
preparation; making beds (with the bed occupied or unoccupied); brushing,
combing, and shampooing hair; cleaning fingernails and toenails; providing
walking assistance; instructing clients in meal planning, nutrition, and per-
sonal care; helping clients improve methods of routine child care; cleaning
and dusting homes; cleaning kitchens and bathrooms; doing laundry and
ironing; sweeping and vacuuming; shopping for essential items; bagging
trash; purchasing food stamps; washing walls; cleaning closets; shampooing
rugs: ainng mattresses; shoveling snow; installing windows and screens; per-
forming minor carpentry and electrical repairs; performing simple handy-
man activities; and running essential errands.
The clients themselves pay nothing for these services. Instead, as discussed
more fully below, the Employer is reimbursed by DFS on the basis of the
total number of hours of service rendered to clients during monthly billing
periods.
'The Employer is not required to provide the full amount of authorized
hours of service per month to each client. In this regard the Employer's
contract with DFS has been orally modified to require the Employer to
provide a minimum of 65 percent of the roial number of hours of service
authorized for all clients in a given month. Thus, the Employer could pro-
vide less than 65 percent of the hours of service authorized for any individual
client or clients, as long as it provided at least 65 percent of the total hours of
service authorized for all clients dunng that same month.
243 NLRB No. 68
478
ANKH SERVICES. IN('.
each hour of service rendered during that monthly
billing period.6 To support these billings the Em-
ployer is required to maintain detailed operational
records. Finally. the contract provides that it may be
terminated on 30 days' notice by either party at any
time, with or without cause.
As noted, the Employer contends that it shares the
Act's statutory exemption of state agencies DFS and
DMH whether the "intimate connection" or "right of
control" test is applied, and thus the Board should
decline to assert jurisdiction over it.
In its decision in National Transportation Senice,
Inc., 240 NLRB 565 (1979) (Members Penello and
Murphy dissenting),7 the Board abandoned the so-
called intimate connection test as a standard for as-
certaining whether the Board's assertion of jurisdic-
tion over an employer with close ties to an exempt
entity is warranted, and decided that from thence-
forth it would look only at whether the employer ex-
ercises sufficient control over the employment condi-
tions of its employees to enable it to engage in
meaningful collective bargaining with a labor organi-
zation representing those employees and, if it does,
assertion of jurisdiction is warranted.
In the instant case, the Employer is required by its
contract with DFS to deliver its in-home services in
accordance with a set of"Standards for In-Home Ser-
vice" set out in the contract itself. The first of these
standards is a requirement that the Employer "de-
velop and implement personnel policies and practices
compatible with the expectations" of DFS and Fed-
eral regulations. The Employer is also required to em-
ploy the work force necessary to mplement the con-
tractually specified program of care and to provide
direction and management to insure that services are
delivered according to the individualized service care
plan drawn up for each client by DFS. The standards
also require the Employer to establish and conduct
initial and continuing formal and on-the-job training
programs for its in-home service workers whereby
they will become sufficiently knowledgeable about
and proficient in personal and housekeeping care
tasks to enable them properly to render the services
set out in footnote 4, supra.8 Finally, under the terms
of the contract the Employer's in-home service super-
* The Employer's contract with DMH also provides for reimbursement at
the flat rate of $5.75 per hour of service rendered. In addition, the DMH
contract provides that the fees for services charged by the Employer shall not
be greater than those fees charged to the general public for the same services;
the Employer's contract with DFS contains no similar provision, With this
exception, the Employer's contract with DMH is sufficiently similar in all
material respects to its contract with DFS to make further discussion of the
DMH contract unnecessary
7 That decision issued subsequent to the Regional Director's Decision and
Direction of Electon herein.
I Indeed. the services listed in fn. 4. supra, are themselves set out in the
aforementioned section of the DFS contract entitled "Standards." as manda-
tory or optional personal care and housekeeping activities
visors are required to screen, interview, and make rec-
ommendations to the Employer as to the employabil-
ity of applicants for in-home service positions:
schedule and assign in-home service workers for spe-
cific duties and responsibilities with individual cli-
ents: supervise their work and counsel them in regard
to improvement of their performance: and monitor
and evaluate their performance and make recommen-
dations to the Employer regarding their promotion or
termination. Thus, by the very terms of its contract
with DFS, the establishment and management of per-
sonnel policies and programs and the supervision of
the in-home service work force are placed squarely in
the control of the Employer.
The record establishes that the Employer's employ-
ees are not covered by Missouri Civil Service regula-
tions. Further, the testimony of the Employer's cor-
porate secretary, John B. Roman, shows that the
Employer has sole and final discretion and authority
over, inter alia, (I) the hiring of individual in-home
service workers from among the applicants who meet
certain contractually mandated minimum criteria:9
(2) their promotion, discipline, and discharge: (3)
their hourly wage rates,'° working hours, and schedul-
ing;" (4) whether to pay them holiday, vacation, or
sick pay; (5) whether to establish health, welfare, pen-
sion, and retirement programs for them; (6) the size
and composition (i.e., full time and part time) of the
in-home service work force; and (7) the establishment
and implementation of work rules and seniority, lay-
off and grievance procedures, and rules regarding the
purchase and wear of uniforms. According to Roman,
neither DFS nor DMH has any authority or control
over the Employer in the above matters.
Thus, on the basis of the overwhelming record evi-
dence in this regard, we conclude that the Employer
has substantial, if not total, control over the wages,
hours, and other terms and conditions of employment
of its in-home service workers, and that the Employer
is thus able effectively to engage in meaningful bar-
gaining over these matters with a labor organization
representing them. We shall therefore assert jurisdic-
tion over the Employer.
'The DFS contract requires that in-home service workers he "mature"
individuals, age 18 or over, with at least an eighth grade education.
ma The Employer is required to abide by Federal and state minimum wage
standards. At the time of the hearing the Employer's in-home service work-
ers were paid between $2.65 and $3.00 per hour. As indicated above. the
Employer is reimbursed by DFS and DMH at the flat rate of $5.75 per hour
for each hour of service rendered to a client
11 Indeed, the Employer's current written personnel policies provide. inter
aria, that "lthe Employer] has no policy for giving [in-home service workers]
vacation or sick pay or for paying for holidays; their fnnge benefit is that
they are able to ork fior the hours that are convenient to them" (emphasis
supplied) The Employer's current written work rules also provide. inter ala.
that these workers must be available fir at least 4 hours olf work between the
hours of 8 a m and 5 p.m on the days they wish to work. and that overtime
must he approved in advance by the Fmplyer.
479
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
As indicated above, however, the Employer also
contends that we should decline to assert jurisdiction
herein on the grounds that the in-home service work-
ers are individuals employed in the domestic service
of families or person in their homes and are thus ex-
cluded from the definition of "employees" under Sec-
tion 2(3) of the Act. We find no merit in this conten-
tion.
While this issue presents a novel question,'2 we find
that the individuals petitioned for herein do not qual-
ify as being "in the domestic service of any family or
person at his home."
Here we are not presented with a few individuals
who are employed by the homeowner or resident of
the home in which they perform their domestic ser-
vices. Rather, we are presented with a stipulated unit
of approximately 40 persons, each of' whom works
from time to time in the homes or residences of nu-
merous clients and all of whom are employed by the
Employer and not by the clients.' Thus, our focus is
on the principals to whom the employer-employee re-
lationship in fact runs and not merely on the undis-
putably "domestic" nature of some of the services
rendered."4 In this regard, we note that the wages of
the in-home service workers are paid by the Em-
ployer, not the clients, who themselves pay nothing
for the receipt of services rendered.' Thus, the in-
home services workers are not employed by the
homeowners or residents in whose homes the in-home
service workers provide their services; although the
in-home service workers do render their services to
the clients, they nevertheless perform their services on
behalf of and are clearly employed by the Employer. 6
12 There appears to be no reported Board precedent interpreting this part
of Sec. 2(3). However, in Child and Family Service of Springfield, Inc., 220
NLRB 37 (1975) (then Chairman Murphy dissenting on other grounds),
without commenting on the potential 2(3) issue. we asserted jurisdiction and
found appropriate a union comprsed in part of employees classified as
"homemakers" who, like the in-home service workers in the instant case,performed light housekeeping, shopping. meal preparation, and laundry ser-
vices for elderly and ill individuals in order to maintain them in their own
community and to prevent their institutionalization.
1" See our recent decision in 30 Sutton Place Corporation, 240 NLRB 752,
fn. 6 (1979), where, albeit in a somewhat different factual setting, we dis-
cussed this fundamental distinction in employment relationship in the con-
test of a theoretical exclusion of employees from the Board's jurisdiction
under the "domestic service" exclusion of Sec. 2(3) of the Act. (The inadver-
tent reference in the cited portion of 30 Sutton Place to Sec. 2(2) of the Act
was due to a typographical error.)
'"See Social Security Board v. Nierotko, 327 U.S. 358, 365-366 (1946),
construing the term "service" in the context of Sec. 209(b) of the Social
Security Act of 1935, as amended, to mean not only work actually done, but
the entire employer-employee relationship for which compensation is paid to
the employee by the employer.
'5 In fact, the in-home service workers are expressly prohibited by the
Employer's written work rules from accepting any tips or gifts from clients
under any circumstances.
is Even beyond this fundamental and ultimately dispositive consideration.
we note also that while a client may request that a particular in-home service
worker be assigned to or reassigned from the client. the Employer is under
no obligation to accede to the client's request. Furthermore, if a client re-
quest that an in-home service worker perform a service which the Employer
Moreover, as shown by the legislative history of the
National Labor Relations Act, Congress has explic-
itly stated what type of individual it intended to
exempt from the coverage of the Act by the "domes-
tic service" exclusion. Quite clearly it meant to ex-
clude "domestic servants. "'7 The Congress did not,
however, elaborate on the term "domestic servant,"
nor did it define the scope of any particular employ-
ment relationship it may have intended to exempt
from the operation of the Act in this regard. Nor,
apparently, have the Supreme Court or lower Federal
courts been called upon to construe the parameters of
the "domestic service" exclusion of the Act. Thus,
neither the Congress nor the courts have given us any
reason to believe that the former intended to exclude
from the coverage of the Act any other than those
individuals whose employment falls within the com-
monly accepted meaning of the term "domestic ser-
vant."'8
In view of the foregoing, we find that the Employ-
er's in-home service workers are employees within the
meaning of the Act rather than "individuals em-
ployed in the domestic service of any family or person
at his home," and that, therefore, there is no statutory
impediment to processing the petition in this case
pursuant to the terms of the Regional Director's De-
is not contractually required to provide, the in-home service worker must
refuse the client's request. Similarly, a client's request that an in-home ser-
vice worker work beyond the number of hours specified bor that client will
not be granted. Thus, it is abundantly clear from the record that the client
has no control over the wages, hours, or other terms and conditions of the in-
home service worker's employment, but that that control is vested solely in
the Employer.
I Thus:
As now drafted, the bill does not relate to employment as a domestic
servant . .. [The word "employee" is] so defined as to exclude from the
operation of the Act domestic servants.
S. Rept. No. 1184, 73d Cong., 2d sess. I, 3 (1934), reprinted in I Leg. Hist. of
the National Labor Relations Act, 1935 at 1099, 1102 (1949) (emphasis sup-
plied).
'8 In an early case interpreting Sec. 2(3), the U.S. Court of Appeals for the
Ninth Circuit considered the consequences of extending the meaning of the
"domestic service" exclusion beyond its common usage. In North Whittier
Heights Citrus Association v. N.LR.B., 109 F.2d 76 (9th Cir. 1940), cert.
denied 310 U.S. 632, enfg. 10 NLRB 1269 1939), the court ruled that the
employees in question there were not within the "agricultural laborer" exclu-
sion of sec. 2(3) of the Act. The court commented that:
The purpose of the Act is clear and we find the Act specifically ex-
cepting [any individual employed as an agricultural laborer. or in the
domestic service of any family or person at his home, or any individual
employed by his parent or spouse] from the Act's] provisions... . Why
is "any individual employed by his parent or spouse" exempted? Be-
cause (not excluding other reasons) in this classification there never
would be a great number suffering under the difficulty of negotiating
with the actual employer and there would be no need for collective
bargaining and conditions leading to strikes would not obtain. The same
holds good as to "domestic service", and the same holds good as to
"agricultural laborer" if the term be not enlarged beyond the usual idea
that the term suggests. Enlarge he meaning of an of these terms beyond
their common usage and confusion results.
Id at 80 (emphasis supplied). See also. in this same vein, N.L. R B. v. E. C
Atkins & Company, 331 U.S. 398. 403 (1947), and N.L.R.B. v Hearst Publi-
cations, Inc., 322 U.S. II1I, 129 (1944) (construction of terms in accordance
with the purposes and policies of the Act).
480
ANKH SERVICES, INC.
cision and Direction of Election which, with the ex-
ception of his application of the "intimate connec-
tion" test, we hereby affirm. Accordingly we shall
remand this case to the Regional Director to take
whatever further steps are appropriate under that De-
cision and Direction.
ORDER
It is hereby ordered that this case be, and it hereby
is, remanded to the Regional Director for Region 14
for further appropriate action.
MEMBER PENELLO and MEMBER MURPHY, dissenting:
We would not assert jurisdiction over this Em-
ployer, as we find that it shares the "State or political
subdivision" exemption of state agencies DFS and
DMH under Section 2(2) of the Act, and that the
Board is therefore precluded from asserting jurisdic-
tion over it.
In reaching this conclusion we would apply the
"intimate connection" test which, for the reasons set
out in our dissenting opinion in National Transporta-
tion Service, Inc., supra, we still find to be an appro-
priate and viable standard for determining whether to
assert jurisdiction over an employer whose operation
is closely connected to a governmental entity. Apply-
ing that test to the instant situation, we conclude that
the Employer's in-home services are so closely related
to the exempt functions and purposes of the Missouri
Division of Family Services and Missouri Depart-
ment of Mental Health that the national policy con-
siderations underlying the exemptions accorded to
these state agencies apply with equal force to the Em-
ployer itself so as to preclude the exercise of our juris-
diction in this case.
The provision of free public welfare services, such
as are provided by the State of Missouri in this case,
to aged or mentally or physically infirm individuals
who would otherwise not be able to afford such care
with a view towards maintaining such individuals in
their own homes and thereby preventing their institu-
tionalization is clearly a legitimate and recognized
governmental function.' Indeed, until 1977 the State
of Missouri provided the bulk of such services directly
through its own state employees. Now it performs this
function primarily through private concerns such as
the Employer. Truly, there could be no closer connec-
tion between the exempt functions of DFS and DMH
and the services provided by this Employer than that
which exists in this case. The relationship between the
Employer and these two state agencies is much more
than merely contractual; it is. quite literally, essential,
going as it does to the very essence of the exempt
functions performed by these two agencies.
For these reasons we would decline to assert juris-
diction over this Employer in this proceeding. 0
i* The statutory mandate for the Missouri Division of Family Services, for
example. empowers that agency. inter aia. to:
Plirovide appropriate public welfare services . and to provide such
public welfare services to aid needy persons who can be so helped to
become sell-supporting or capable of self-care.
M. Rev. Stat. Se. 207.020115} 1977).
10 In light of this we find it unnecessary to pass on the issue of whether in-
home service worker- fall within the "domestic service" exclusion of Sec. 2(3)
of the Acl.
481